ECIA - Presentation by Edgar Garcia Casellas (Barcelona 6 juny 2013)
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ECIA - Presentation by Edgar Garcia Casellas (Barcelona 6 juny 2013)

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Presentations of the ECIA's Policy Learning Platform meeting on June 5th and 6th, 2013 in Barcelona. The conference focused on Access to Finance. ...

Presentations of the ECIA's Policy Learning Platform meeting on June 5th and 6th, 2013 in Barcelona. The conference focused on Access to Finance.

The European Creative Industries Alliance (ECIA): http://www.eciaplatform.eu/

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    ECIA - Presentation by Edgar Garcia Casellas (Barcelona 6 juny 2013) ECIA - Presentation by Edgar Garcia Casellas (Barcelona 6 juny 2013) Presentation Transcript

    • 1 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. ECIA Policy Learning Platform Barcelona, 6th of June 2013 Edgar Garcia, ECIA coordinator of the WP on Access to Finance Catalan Institute for the Cultural Companies (ICEC)
    • 2 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. First results from ECIA’s WG on Access to Finance thematic paper
    • 3 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. ECIA’s WG on Access to Finance members Edgar Garcia Casellas – Coordinator of the WG (ICEC) Michela Michilli – Concrete Action FAME (FILAS) Marija Popovic - Concrete Action CI-Factor (EDC) Miguel Rivas – CLAND, Audiovisual and Digital Cluster Andalucía Jenny Kornmacher - Hamburg Kreativ Gesellschaft Gmbh Ragnar Siil –Estonia Ministry of Culture Henri Monceau – Cabinet of the Minister for Economy, Wallonia Thierry Baujard – Media Deals Johanna Bolhoven – Creative England
    • 4 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Current framework • The on-going financial and economic crisis has an important impact on the adoption of public funding initiatives for the CCIs . • Growing acknowledgement of the economic performance of the cultural and creative sectors. • The cultural and creative sector can become the basis for economic recovery and potential growth in Europe. • The sector’s role as an upcoming attraction for private funding should be equally supported and enforced. • The digital shift places the creative sector in the need to reassess business models.
    • 5 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Key issues and challenges on Access to Finance Creative sector’s main challenge • To find innovative business models, which would allow them to achieve investment readiness within the new digital environment.
    • 6 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Key issues and challenges on Access to Finance • There is a need of a new understanding of the creative sector itself. • NOT a separate entity from other business sectors! • Existing financial tools for SMEs can and should come into use for the support of creative industries. • And tailor-made solutions should come up only if inadequacy of existing schemes is diagnosed!
    • 7 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Key issues and challenges on Access to Finance • There is a a need for private initiatives offering a better access to finance to the sector. • Investments in the CCIs should be encouraged in a three-fold way: – to train CCIs to be more investment-ready – to raise awareness on the profits of intangible assets among investors – to improve IP valuation
    • 8 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Key issues and challenges on Access to Finance • There is a a need to integrate innovation and multiply the impact of a relatively low public funding. • Public sector should take into consideration new emerging trends of financing small creative industries, especially at an early stage. – microcredit instruments – P2P (peer to peer) lending – crowdfunding • Cooperation of public bodies with crowdfunding platforms could be achieved through a regulatory framework promoting such initiatives from short-term project-based to long-term business-based. • Introduction of financial engineering instruments: matching public grants with privately raised funds in order to ensure the financial sustainability of CCIs.
    • 9 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Key issues and challenges on Access to Finance • There is a a need for internationalization of the creative sector. • Although many SMEs are already international, the lack and difficulty of accessing international investors limit success of cross border strategies. • Investment models involving neighboring countries should be developed. CA FAME is doing a technical analysis on the viability of a Pan-European VC fund.
    • 10 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Assessment of current policies and policy initiatives Examples of policies and initiatives Cross- sectoral Invest. Awareness Alternative financing Leverage Cross- border Level Score (1-5) MEDIA Production Guarantee Fund Pan European Guarantee for film production x x x EU 4* Belgian Tax shelter for films Key finance instrument for film finance x x x Nat. 4* OSEO Guarantee Offer risk mitigation to innovative SME x x Nat. 3 Film London PFM (Production Finance Market) http:// filmlondon.org.uk/PFM Key finance market supported by MEDIA x x x EU 4* EASY Early stage investors www.earlystageinvestors.org/ Pilot project for cross border investment x x x x EU 2 FILAS VC Fund http://www.filasinternational.eu/ Regional fund for CI x X Reg. 3
    • 11 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. CIM Venture Pan European CI Investment Fund x x x EU 1 Caisse des Depots VC fund „Heritage and Creation“ Development fund for established CI x Nat. 3 VC Fonds Kreativwirtschaft Berlin http://www.ibb-bet.de/vc_fonds_kreativ.0.html?&L=1 Public private fund focussing on CI x x Reg. 4* European Regional Development Fund (ERDF) Key regional fund x x EU 3 How to grow platform CI Online platform x x x EU 3 European Angels Fund (EAF) http://www.eif.org/what_we_do/equity/eaf/index.ht m EIF co angel fund x x x EU 1 Enterprise Investment Scheme (EIS http://www.hmrc.gov.uk/eis/ Key UK scheme to support innovation x x x Nat. 4* Seed4Start www.seed4start.org Pilot project on cross border investment x x x x EU 2
    • 12 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Nordic Game Program http://nordicgameprogram.org/ Key programme for Video Game x x Nat. 4* INTERREG Key interregional funding x x x EU 3 JEREMIE http://www.eif.org/what_we_do/jeremie/index.htm Co investment scheme x x x EU 2 European Progress Microfinance Facility http://ec.europa.eu/social/main.jsp? catId=836&langId=en Pan European Micro loan x x x x x EU 2 CIP Microcredit Guarantee Window http://www.eif.org/what_we_do/microfinance/microc redit_guarantees/index.htm Pan European Micro credit guarantee x x x x x EU 2 Entrepreneurship and Innovation Programme (EIP) http://ec.europa.eu/cip/eip/index_en.htm Support programme for innovative SME x x x EU 2 SME Guarantee Facility http://ec.europa.eu/enterprise/policies/finance/cip- financial-instruments/index_en.htm x x Nat 2
    • 13 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. First steps towards a benchmarking: the best rated practices and policy initiatives Detection of already undertaken policies and upcoming policy initiatives in the field of access to finance for CCIs, which have been be reviewed according to their effectiveness in replying to one or more of the key issues identified. To explore and analyze key schemes through: their goals, results and context the role of the private and public sector their cross sector/spill over character their replication potential the success or failure factors
    • 14 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. First steps towards a benchmarking: the best rated practices and policy initiatives draft list of policy examples MEDIA Production Guarantee Fund (EU) OSEO Guarantee (FR) Cultur-Ondernemen Guarantee Fund (NL) FILAS VC Fund (IT) Caisse des Depots VC Fund “Heritage and Creation” (FR) VC Fonds Kreativwirtschaft (Berlin) Nordic Game programme (Nordic countries) Production Finance market (London Film Festival / UK) Belgian Tax shelter for audiovisual production (BE) Nordstarter – Hamburg Kreativ Gesellschaft (GE) Repayable Grants – ICEC (CAT) CIM Venture (FI)
    • 15 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Case study 1: VC KreativWirtschaft Berlin Fund  For Berlin based creative industries companies  Investments areas: film, radio, TV, publishing, music, entertainment, advertising, fashion, design, architecture, multimedia, games, software, art and culture.  Fund volume: 30M EUR  50% of the funds by the Investitionsbank Berlin, and 50% by the EU Regional Development Fund (ERDF)  The VC fund only provides co-financing if private investors cover at least 50% of the respective financing round.  Amount invested per round: average 1.5M EUR  Maximum of 3M EUR per company over multiple rounds  The VC fund only holds minority shares in the portfolio companies  Particularly supporting start-ups  Deal flow in arts and culture identified as lower than in multimedia, games, software, music and TV
    • 16 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Case study 2: Production Finance market (London)  two-day annual event at the BFI London Film Festival  connects international producers and financiers to encourage new film financing relationships  Financiers: mature and leading financiers (UK and internat.) and public funding bodies  Producers: producers (UK and international) with a significant production track record or with a highly promising project aimed at the international theatrical market, with a budget above €1M (not a ‘micro-budget’ film market)  The uniqueness of the PFM lies in the focus on the financing and not the co- production part, involving real financiers.  The 2012 market attracted almost €305M of production value, and leading equity, hedge fund, tax, banking, and public and broadcaster financiers  To date, some 50 or more films and companies have benefited directly from the PFM  The 2013 edition will bring more than 100 producers, financiers and new forms of investment together
    • 17 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises.  Following study on role of banks in the film industry  Once film projects are financed, there is a need to cash flow the pre sales and subsidies contracts (bridge financing)  2 specialized public film guarantors (France and Spain) have been awarded 8M EUR for a pilot project till end 2013  Results till now: 28 bank loans have benefited from this guarantee, representing a total loan amount of over EUR 38 M, for the production of 21 films in 9 different countries.  The MPGF has provided guarantees and therefore facilitated loans in many European countries that until now could not access bridge financing.  The difficulties encountered are: Lack of expertise from banks in the sector of film finance Banks are very local and do not look at projects outside region or country Size of loans is often too small making the deal commercially not interesting for banks leading to a limited investment of resource in the sector Project lending VS company lending makes it difficult for credit committee to assess risk. Case study 3: MEDIA Production Guarantee Fund (MPGF)
    • 18 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. First steps towards a benchmarking: a methodology Impact Assessment – starting 3 June Online survey + telephone follow up Two target groups: The Initiator of each funding scheme At least two beneficiaries of each funding scheme
    • 19 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Impact Assessment Quantitative survey: estimation of number of projects supported, amounts invested Qualitative:  Sector transversality Aim > assess the support of creative industries in generic schemes  Key success factors Aim > compare the perception of “success” and “fail” for initiators and beneficiaries and suggest areas of improvement  Replication potential Aim > distinguish the geographical/ sectorial specificities from the factors allowing to multiply the scheme in other regions/ creative sectors Other areas of assessment: • Improvement of public policy; • Mobilization of private finance; • Long term impact; • Social or environmental impact
    • 20 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Conclusions of the assessment • A fragmentation between initiatives specialised in CCIs and policies with a larger scope is observed. • Many of the not sector-specific existing tools have proven very effective in all fields of application, and CCI stakeholders should be encouraged to make good use of them. • Investment readiness and awareness-raising schemes, as well as financial leverage instruments to support risk mitigation and exchange of expertise, have been already largely implemented in all levels (EU, national and regional). • However, policy-makers are aware of the need to introduce and further support such initiatives. • In the context of such existing initiatives, the spotlight should be henceforth put on IP assets valuation.
    • 21 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Other relevant conclusions related to Access to Finance • Despite the fact that the creative sector brings together a wide variety of different sub-sectors, the sector faces common needs… and common solutions are as much required as sector-specific solutions. • The most needed generic solutions to be undertaken for all creative sub-sectors are: – the shifting from project to business finance – and the shifting from grants/subsidies/(credit) to equity finance • There is a special need for cross-sectoral networking. • Clustering and network activities are expected to bring specific expertise by building bridges between various stakeholders: related industries, CCIs, public bodies, investors, producers, services providers, educational and research institutions, financial institutions and other private and government institutions.
    • 22 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Other relevant conclusions related to Access to Finance • There is a need to identify the creative sub-sectors that actually dispose the most or least advanced market intelligence and that consequently are the most or least attractive for investors. • A crucial point is the bond between new CCI business models and an innovative use of ICT services.
    • 23 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Other relevant conclusions related to Access to Finance Conclusions of the “Investor’s Survey” (Taking the Pulse of Investors, traditional and alternative Finance Sources in Financing the CI) resulting from the CI-Factor work ended in February 2013. • 82% of the investors invest in ICT-based companies • Thus, a thorough ICT understanding across the creative sector, is expected to attract more investors to all creative sub-sectors. • A challenge: to transfer knowledge through synergies between highly innovative and less ICT-aware creative industries. • The creative-sectors the least targeted for finance are: the performing arts, architecture and crafts. • Thus, its professionalization by the involvement of experienced and specialized M&A consultants is crucial in order for cultural organizations to emerge with new competitive and innovative business models .
    • 24 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Other relevant conclusions related to Access to Finance Conclusions of the “Investor’s Survey” (Taking the Pulse of Investors, traditional and alternative Finance Sources in Financing the CI) resulting from the CI-Factor work ended in February 2013. • Investors show special interest for the following sub-sectors: Software, Games, Advertising, Film/TV programming and Publishing. • Investors find more interest in investing in start-ups. • Conclusion: there is a particular need to encourage these companies to become investment-ready from an early-stage.
    • 25 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. Briefing on key issues and challenges on Access to Finance • Opening generic financial schemes to Creative Industries SME and... • More private initiatives offering a better access to finance to the sector (awareness and training) • Integrate innovation and multiply the impact of a relatively low public funding (leverage effect) • Internationalization of the creative sector (increase revenues potential)
    • 26 DESENVOLUPAMENT EMPRESARIAL ICEC This initiative is financed under the Competitiveness and Innovation Framework Programme (CIP) which aims to encourage the competitiveness of European enterprises. More information about ECIA’s WG on A2F: Edgar Garcia (WP A2F Coordinator) edgarcia@gencat.cat Laia Sanahuja (Project Coordinator) lsanahuja@gencat.cat Àlex Pi (ICEC’s Finance expert) apih@gencat.cat